Besides the transfer fee, what other costs may Better Blend charge the franchisee for a transfer?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
anchisee's taxes and other liabilities are paid. BBF may assign this purchase option to another party.
ARTICLE 15. TRANSFERS
- 15.1 By BBF. BBF may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and BBF may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that BBF entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing BBF at least 60 days prior notice of the proposed Transfer, and without obtaining BBF's consent. In granting any such consent, BBF may impose conditions, including, without limitation, the following:
- (i) BBF receives a transfer fee equal to $17,500 plus any broker fees and other out-ofpocket costs incurred by BBF;
- (ii) the proposed Transferee and its owners have completed BBF's franchise application processes, meet BBF's then-applicable standards for new franchisees, and have been approved by BBF as franchisees;
- (iii) the proposed Transferee is not a Competitor;
- (iv) the proposed Transferee executes BBF's then-current form of franchise agreement and any related documents, which form may contain materially different provisions
- than this Agreement (provided, however, that the form will be amended to provide that the proposed Transferee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed Transferee provide a guaranty in accordance with Section 2.5;
- (vi) Franchisee has paid all monetary obligations to BBF and its affiliates, and to any lessor, vendor, supplier, or lender to the Business, and Franchisee is not otherwise in default or breach of this Agreement or of any other obligation owed to BBF or its affiliates;
- (vii) the proposed Transferee and its owners and employees undergo such training as BBF may require;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, a franchisee considering a transfer of their franchise should be aware of potential costs beyond the transfer fee. Better Blend may impose conditions when granting consent for a transfer, including that the franchisee pay any broker fees and other out-of-pocket costs incurred by Better Blend.
Additionally, the proposed transferee and their owners may be required to undergo training, for which Better Blend may charge its then-current training fee. As of the agreement date, this training fee is $250 per person per day. The franchisee must also ensure that all monetary obligations to Better Blend, its affiliates, lessors, vendors, suppliers, or lenders are paid, and that they are not in default or breach of the Franchise Agreement or any other obligation to Better Blend or its affiliates.
These provisions mean that a Better Blend franchisee looking to transfer their business needs to factor in not only the transfer fee itself, but also potential broker fees, out-of-pocket costs incurred by Better Blend, training fees for the new transferee, and any outstanding debts or obligations. Failing to account for these additional costs could make the transfer process more expensive and complicated.